India: Moderate trade sentiment, cautious buying weigh on sponge iron prices

• Trades improve, prices ease marginally amid cautious buying
• Pellet prices rise but weak steel demand keeps sponge under pressure

The domestic sponge iron market witnessed moderate trading activity today, improving from the subdued session recorded yesterday. Prices across key regions declined marginally by INR 50-300/t d-o-d, as buyers remained cautious despite improved market participation. Trading activity picked up, but deal conversions were largely confined to immediate requirements, with buyers continuing to resist higher offer prices.

Demand from the finished steel segment remained weak, keeping procurement by secondary steelmakers largely need-based. Although trading volumes improved compared to the previous session, bulk procurement was still absent, limiting the pace of market recovery. In the Raipur region, sponge iron prices softened marginally despite a shortage of pellets, as weak downstream demand outweighed the impact of tighter raw material availability.

Raw material

Raipur pellet prices increased by INR 300/t d-o-d to around INR 9,850/t amid supply tightness. In the imported coal market, South African RB2 (5,500 NAR) prices remained stable at around $106/t CNF Gangavaram, while domestic non-coking coal prices at Visakhapatnam port were also steady at approximately INR 10,300/t.

Trade volume

Need-based procurement continued to dominate the market, although trading activity improved from the previous session. BigMint recorded sponge iron trade volume of around 18,920 t, up from 10,100 t in the previous trading session.

Rationale

Prices have been derived based on transactions, offers, bids, and indicative price data sets. Transactions are considered as T1 and given a weightage of 50%, whereas other data sets are considered as T2 and given a weightage of the balance 50%.

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